quote:S corporation distributions are not taxed as dividends to the shareholder unles the company operated as a C corporation and had undistributed earnings and profits. The OP wrote that the business has been an S corporation since inception, so it has no accumulated E&P to distribute. All of ht eS corporation income is taxable to the shareholders whether or not any dsitributions are made to the shareholders.
Distribute earnings through dividends assuming you are a shareholder
quote:Income and losses from rental real estate activities has all sorts of special rules. How those rules apply depends on several factors that go beyond the scope of a message board discussion. You need to sit down with a tax professional and review your prior years tax returns and current year information (both the S corporation and your individual) to determine the best approach to minimizing the tax consequences of revenue from rental real estate activities.
What info do you need? I'm all ears Poodlebrain
quote:Rental real estate is by definition a passive activity unless there is material participation. There are separate line items on the Schedule K-1 for rental real estate and other rental activities. The reason is because rental real estate requires separate reporting via Form 8582, used to determine passive activity losses allowed.
The character of the income to the S-Corp is "passed through" to the shareholders. Since this rental income is ordinary income, it will be ordinary income to the shareholders.